The Basics – Medicare Supplement Insurance

Medicare supplement insurance fills in the gaps between what Medicare pays and what you must pay out-of-pocket for deductibles, coinsurance, and co-payments.

Medicare supplement policies only pay for services that Medicare deems medically necessary, and payments are generally based on the Medicare-approved charge. Some plans offer benefits that Medicare doesn’t, such as emergency care while in a foreign country.

There are 10 standardized Medicare supplement insurance plans. Each plan is labeled with a letter of the alphabet and offers a different combination of benefits. Plans F also offers a high-deductible option. Plans K, L, and M have a cost-sharing component. Click here to see a chart with all the plans.

Medicare supplement policies are sold by private insurance companies that are licensed and regulated by your state’s department of insurance. Medicare supplement benefits, however, are set by the federal government. Medicare supplement policies are automatically renewed each year.

Here are a few things that you should know about Medigap also called Medicare Supplement insurance, if you are turning 65 or comparing plan options:

To get a Medicare Supplement, you MUST have both Part A & Part B.

When you have a Medigap plan you will pay a premium (usually monthly) to the Medicare Supplement insurance company.

All Medicare Supplement plans are standardized and are the same from company to company, so price is the primary differentiating factor. The plans available are listed here (Medigap Coverage Chart), but not all companies carry all plans.

All supplement plans use the Medicare “crossover” system so you do not have to file claims for any supplement plan.

All supplement plans allow you to go to any doctor or hospital that takes Medicare – there are NO networks with the exception of some plans that are called Medicare Select plans.

Unlike Medicare Advantage plans, Medigap plans are “guaranteed renewable” meaning that your insurance company cannot cancel you unless you do not pay the premiums.

The amount you pay in premium for a Medigap plan is not guaranteed. An insurance company may raise the premium as often as once a year on everyone in the same class. In addition, if you have an attained-age policy, a company may raise your premium on your birthday. But you cannot be singled out for a rate increase.

Medigap plans do not cover prescription drugs. You have to get Medicare Part D in order to have drug coverage. Prescription drugs are also covered by some Medicare Advantage plans.

Contrary to popular belief, there are NO annual enrollment periods for Medicare Supplements. You have a 6-month initial enrollment period when you first turn 65 or first enroll in Part B. During this time there is no medical underwriting or health questions. After your initial enrollment period has passed you can still sign up for a supplement or change your supplement at any time; however, you will in most cases have to answer health questions and the insurance companies may charge you more or not accept your application.

You can get more information by visiting other pages here on our website or by visiting the Government Medicare web site.